Soybean futures bounced back above $14 a bushel after the US made a surprise cut to its soybean harvest estimate, but wheat struggled after a downgrade in the export forecast to a 51-year low.

Chicago soybean futures for November leaped 2.7% to $14.14 a bushel in the immediate aftermath of the US Department of Agriculture’s benchmark monthly Wasde report on world crop supply and demand, before easing back to $13.98 a bushel, up 1.6% on the day.

The gain reflected a cut of 65m bushels to 4.31bn bushels (117.4m tonnes) in the USDA’s forecast for the domestic soybean harvest this year, contrasting with expectations of a small upgrade.

The USDA – rather than executing a marginal upgrade to its yield estimate, as resilient crop condition had indicated – downgraded the figure to a three-year low of 49.8 bushels per acre, citing results of surveys in top growing states including Illinois, Indiana, Iowa and Minnesota.

“The October objective yield data for the combined 11 major soybean-producing states indicate a lower pod count compared with the previous year,” with Nebraska showing the steepest decline, the USDA said.

‘Increased competition’

The harvest downgrade was in part offset by a cut of 40m bushels to 2.05bn bushels in the USDA’s forecast for US soybean exports in 2022-23, also a three-year low, thanks to “increased competition from South America”.

Nonetheless, the US stocks estimate for the close of the season, held at 200m bushels (5.45m tonnes), came in well below the 248m-bushel number that investors had expected.

Inventories at that level would represent the lowest since 2015-16.

‘Uncompetitive export prices’

For wheat, however, a cut to the 2022-23 US export forecast of 50m bushels to 775m bushels – the lowest since 1971-72 – proved less palatable to investors.

Chicago wheat futures for December stood 1.4% lower at $8.87 ¾ a bushel in late trading, back below their 20-day moving average.

The export downgrade – “on reduced supplies, slow pace of export sales, and continued uncompetitive US export prices” – overshadowed a cut of 34m bushels to 576m bushels in the forecast for US wheat inventories at the close of this season – the lowest in 15 years.

The stocks estimate factored in the downgrade to this year’s US wheat estimate as revealed two weeks ago.

Of wheat quotes in major exporting countries, US supplies “experienced the largest jump” over the past month, of $67 per tonne, buoyed by the harvest downgrade, the USDA said.

Canadian prices rose by $33 per tonne and European Union ones, by $25 per tonne, with Russian values adding $14 per tonne.

‘Raised freight rates’

Corn futures stood 0.2% lower at $6.91 ¾ a bushel in late deals, weighed in part by the decline in wheat prices.

However, prices were also pressured by a lower-than-expected downgrade, of 48m bushels, in the forecast for US stocks at the close of this season, even though this left the stocks figure at a nine-year low of 1.17bn bushels (29.8m tonnes).

While the estimate for this year’s US harvest was cut by 49m bushels, close to market expectations, the export forecast was downgraded too, by 125m bushels to 2.15bn bushels, the weakest since 2015-16.

The export revision reflected “smaller supplies and slow early-season demand”, the USDA said, noting too that “low water levels in the Mississippi River have hampered grain deliveries and raised freight rates”.

While US corn bids were up $12 per tonne month on month at $337 per tonne, and Argentine ones up $20 for the month, Brazilian offers were unchanged at $294 per tonne.

The USDA highlighted that “Brazil corn exports were record high in August and September volumes were the third largest on record”.